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A Year for Accumulation, Jeff Christian August 2019 Part 2

August 14, 2019
Video Transcript

Sean Brazney: Hello, my name is Sean Brazney, Sales Director from Monex Deposit Company. I'm here with Jeffrey Christian, Managing Partner of CPM Group. Jeffrey, it's been a couple months, a lot has changed in the precious metals market and I know our viewers are eager to hear from you. So, I greatly appreciate you being with us today.

After the Fed lowered rates in July, we saw Trump immediately add some tariffs to China and then China came back and threatened to allow the Yuan to fall below, some critical pain to the U.S dollar. Immediately, the internet seemed to erupt in currency war talk. Do you think that that's noise or is there something really important in this that we should focus on?

Jeffrey Christian: I think both. I mean, there's something important, which is that the trade wars are now transforming into currency wars and it's not just China that's looking at it. I mean, if you actually looked at it, at the same time that the Yuan was devaluing against the dollar, the dollar was devaluing against the Euro and has stayed relatively low against the Euro since that time. I think that there is some real news there, which is that governments are looking at currencies to help fight the trade wars. I think there's noise in that the 7.0 level that the Yuan fell below is sort of an artificial construct. The important thing is that the Yuan is weakening against the dollar, and the dollar is weakening against the Euro, and governments are looking at currencies to use them as weapons in the trade war, that's the important thing, whether it's 7 or 7.1 or 7.2, I think, that's the noise and it tends to be the kind of stuff that you pick up in the New York markets as opposed to the global market.

Sean Brazney: Circling back to the PGMs with platinum and palladium. After palladium hit its record high at $1,600 here recently, we talked about the chance to accumulate potentially down around that $1,380's area. It tended to play out and so far has played out fairly well, but the last horse in this race still seems to be platinum, and a lot of speculation that there's still some good potential in platinum as we head into the second half of this year. Do you still feel that there's some pretty good potential going forward in the platinum market?

Jeffrey Christian: We do think there's potential in the platinum market. It may not be the next... you know, the last five months of this year, but it may be into 2020. We think that platinum prices will start to rise and probably will outperform palladium, because palladium is already at record levels, but platinum is at the lowest levels... it's at the lows that we saw in 2004, 2005. So, I think that there is scope for higher platinum prices for a variety of reasons. One is stronger fabrication demand. Another one is continued strict stringent conditions in the South African platinum industry. So, I think that there's a variety of reasons why we're more positive on platinum now than we are on palladium for the next six to twelve months.

Sean Brazney: Thank you Jeffrey. Your perspective is also always very refreshing. You've heard it directly from Jeffrey Christian, Author of Monex's, Year for Accumulation Report. Call Monex today and ask for your free, Year for Accumulation Report. Thank you for your time Jeffrey.

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